Dabur believes demonetisation will be beneficial for organised FMCG players

However, on account of the scarcity of cash available to customers and trade, the company foresees near-term pressures on its businessPTI | December 06, 2016, 12:33 IST

FMCG firm Dabur today said the demonetisation of high-value currency notes would have a beneficial impact on organised players in the segment.

However, on account of the scarcity of cash available to customers and trade, the company foresees near-term pressures on its business.

"Demonetisation of high-value currency note initiated by the government is a positive move for the economy and industry and will lead to better transparency and compliance in the medium to long run. This will be beneficial for organised FMCG players creating a level playing field," Dabur said in a regulatory filing.

Elaborating on the impact, the company said it will vary across channels and geographies and stress is highest for wholesalers and small town grocery shops, who are facing a severe liquidity crisis and are destocking.

"The impact is likely to be positive in modern trade outlets and plastic enabled retailers who are likely to benefit from this change," the company said.

However, on account of continuity of current uncertain situation it is difficult to quantify the impact for the third quarter on the company at this point in time, Dabur said.

"However, it is temporary in nature and the situation will improve with an increase in availability of new currency. In the meanwhile, we are focussing more on modern retail, e-commerce and institutional sales and also encouraging our general trade (GT) retailers to adopt cashless payment systems," the company added in its statement.

This will help in mitigating the overall impact of demonetisation and pave the way for normalisation in the next few months, the company said.